Bitcoin News Update: Japan Strives to Foster Crypto Innovation While Enhancing Investor Safeguards Amid Regulatory Reforms

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Bitget-RWA2025/11/16 19:12

By:Bitget-RWA

- Japan will reclassify cryptocurrencies as financial products under FIEA, enhancing investor protections and aligning with traditional securities regulations. - FSA proposes 20% capital gains tax, strict insider trading rules, and mandatory disclosures for 105 tokens to mitigate risks and ensure transparency. - Exchanges must provide detailed issuer and blockchain data, while banks may soon hold Bitcoin , reflecting Asia's push for tokenized finance infrastructure. - Regulatory challenges include complian

Japan Plans to Redefine Crypto as Financial Assets, Introduces Insider Trading Regulations

Japan is preparing to categorize cryptocurrencies as financial assets under the Financial Instruments and Exchange Act, aiming to strengthen investor safeguards and bring digital currencies under the same regulatory framework as conventional securities. The Financial Services Agency (FSA)

has put forward this reform

, which would require mandatory disclosures for 105 listed cryptocurrencies, lower the capital gains tax from 55% to 20%, and enforce strict rules against insider trading. This regulatory update, anticipated for 2026, demonstrates the government’s effort to encourage innovation while maintaining market stability.

With this change, cryptocurrencies will be regulated similarly to equities and bonds, obligating exchanges to share comprehensive data about token issuers, blockchain infrastructure, and volatility indicators.

Bitcoin News Update: Japan Strives to Foster Crypto Innovation While Enhancing Investor Safeguards Amid Regulatory Reforms image 0

This push for transparency,

comparable to requirements in stock markets

, is intended to reduce the risks linked to less transparent digital assets. The FSA also intends to broaden its supervision to include corporate crypto assets,

with the Japan Exchange Group (JPX)

already considering tighter controls on backdoor listings for firms accumulating significant crypto holdings. At least three companies have delayed their crypto investment strategies after JPX

cautioned that holding too many digital assets

might hinder their ability to raise capital.

This regulatory initiative comes as Japan emerges as a major center for cryptocurrency,

with 14 listed firms

owning more Bitcoin than any other country in Asia. Yet, this growth has also led to notable investor losses. Strategy Inc., which manages a $66 billion

Bitcoin

portfolio,

experienced its share price drop by nearly 50% since mid-2025

, highlighting the instability of corporate crypto reserves. The FSA’s

suggested tax reduction

, aligning with equity tax rates, is designed to encourage more participation and address tax-related obstacles for both individual and institutional investors.

Japan’s regulatory strategy also covers institutional adoption. The FSA is evaluating whether to permit banks to hold Bitcoin and operate as crypto trading platforms, a move that could broaden investment options and help stabilize the market. This is in line with wider trends in Asia, where Japan, Hong Kong, and Singapore are building out tokenized financial infrastructure. Japan’s focus on hardware-based custody and cold wallet protocols,

as discussed by the FSA

, aims to lower operational risks for banks and other financial entities. Meanwhile, Hong Kong’s tokenized bond projects and Singapore’s approval of retail tokenized investment funds showcase the region’s leadership in digital finance.

Implementing these regulations will present challenges, such as increased compliance costs for exchanges and the risk of market segmentation. Nonetheless,

experts believe that the long-term advantages

— including greater institutional involvement and more defined legal standards — will outweigh the initial difficulties. With the FSA planning to introduce the crypto legislation to parliament in 2026, Japan’s clear regulatory approach could establish it as a global frontrunner in balancing crypto advancement with financial security.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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